How Much Does It Cost to Start a Neobank? Sourced Figures

Founders, students and investors often search for a single number for the cost to start a neobank. A number would be misleading, because it hides the biggest choice, which is the regulatory route. This article explains the main routes, the sourced legal minimums, the real cost drivers that regulators and company filings reveal and what the experience of Monzo and Chime suggests about how much money is consumed before a neobank reaches profit. It is an educational overview, not a business plan or legal advice.

The cost to start a neobank begins with the licensing route

Route	What it involves	Typical consequence for cost and time
Own banking licence	Authorisation as a bank by the national regulator, capital, liquidity, governance and systems	Highest capital, longest time, most control
Partner bank (banking-as-a-service)	Brand and app run by the start-up; a licensed bank holds deposits	Lower capital need but fees, dependence on the partner and oversight burdens
E-money or payment institution licence	Authorisation as a non-bank issuing e-money or providing payments	Lower capital floor, but no deposit insurance for customers

See our explainers on how neobanks are regulated and on Are Neobanks Fintechs for the difference between these models.

Legal minimum capital: the sourced floors

Some figures are written into law and can be quoted. Under the EU Capital Requirements Directive, Article 12, authorities must refuse to authorise a credit institution whose initial capital is less than 5 million euros, although member states may authorise particular categories with lower capital, but not below 1 million euros. Under the E-Money Directive, an electronic money institution must hold at least 350,000 euros of initial capital when authorised.

These are legal floors, not the full cost to start a neobank. A regulator can require much more after reviewing a business plan, and the minimums say nothing about technology build, staff or marketing. The version of these texts on legislation.gov.uk is the retained UK copy, so UK and EU readers should check current national rules. In the US, a new bank applicant files with the chartering authority and the FDIC, and the OCC and FDIC publish licensing and de novo guidance that explains what a business plan and capital must cover.

UK example: mobilisation and the first year

The Bank of England describes a mobilisation route for new banks, sometimes called authorisation with restrictions. During it, deposits are limited to 50,000 pounds and the stage can last up to 12 months. The guidance also says funds held to meet capital requirements must not be used to meet mobilisation costs, so a founder needs capital for the requirement plus a separate budget for building out the bank. The bank must show regulators its funding, recruitment, systems, outsourcing and recovery plans. In practice this means paying for people and technology for a long period with little or no revenue.

What the real cost to start a neobank consists of

• Regulatory capital and liquidity: the money that must be held and cannot be spent.
• Technology: core banking systems, app development, security, cloud hosting and card and payment connections, whether built in-house or bought.
• People: engineers, risk and compliance staff, a board and senior managers who must be approved by regulators in many countries.
• Compliance operations: customer verification, transaction monitoring and reporting. Monzo’s 2025 FCA fine of 21,091,300 pounds shows what inadequate controls can cost.
• Customer acquisition and support: marketing, referral schemes, support teams and fraud losses.
• Partner and scheme fees: payments networks and any partner bank charges.

We do not give a figure for each item, because sources vary by country and company, and unsourced numbers would mislead.

What Monzo and Chime show about the money consumed

Monzo’s published history gives a real-world sense of scale. Public records show a loss of 116.3 million pounds for the year ending March 2023, and its first annual profit of 15.4 million pounds for the year ending March 2024. It raised funds repeatedly, including 113 million pounds in June 2019, 600 million dollars in December 2021 and 500 million pounds in April 2024. It also ran customer crowdfunding rounds, including a December 2018 Crowdcube round that raised 18 million pounds in under three hours (ITV News). In its FY2026 results it reported profit before tax of 172.6 million pounds. The company had to raise money for years before profit arrived.

Chime, a US partner-bank neobank, reported a net loss of 203 million dollars in 2023 and 25 million dollars in 2024, according to reporting on its IPO filing, and a Q2 2026 GAAP net income of about 27.9 million dollars. These examples are large, successful companies. They are not a template for a small start-up, and many smaller ventures, such as Xinja and Volt in Australia, handed back their licences. See our guide to neobank profitability for more.

Cheaper ways to test the idea

• Partner with a licensed bank and launch a narrow product, such as a card for a specific group, instead of a full bank.
• Use an e-money route where available and be clear with customers about the lack of deposit insurance.
• Join a regulatory sandbox or similar scheme if your regulator offers one.
• Start with a niche, such as freelancers, students or small businesses, where you can serve customers without competing on every feature.

Each shortcut lowers the cost to start a neobank but shifts risk or limits what you can offer, so be honest with customers about who holds their money.

Mistakes that raise the cost to start a neobank

1. Underestimating the time to authorisation, which can be many months and needs funding throughout.
2. Treating compliance as an afterthought. The FCA said Monzo’s controls did not keep pace with its customer growth.
3. Relying on a single partner bank or middleman without a plan if it fails. The Synapse collapse of 2024 is the cautionary example.
4. Assuming customer growth will become revenue automatically.

Worked example: the shape of a first-year budget

Even without quoting absolute figures, it is possible to show how the cost to start a neobank is distributed. The percentages below are an illustrative example for a partner-bank launch in its first year, not data from any company.

Budget line	Illustrative share of year-one spend	Notes
Technology build and licences	30 percent	Core platform, app, card issuing integration, security
People	30 percent	Engineers, compliance, risk, product, support
Compliance operations	10 percent	Identity checks, monitoring tools, audits
Customer acquisition	20 percent	Marketing, referral rewards, promotions
Partner, scheme and legal fees	10 percent	Partner bank charges, card networks, lawyers

For an own-licence route, add regulatory capital on top, which must be held rather than spent, and expect the people and compliance lines to grow. Consequently, the cost to start a neobank with its own licence is driven less by the app than by the organisation regulators require around it.

Timeline: when the money goes out

1. Months 1 to 6: planning and application. Legal and advisory fees, a founding team, and a detailed business plan. Revenue is zero.
2. Months 6 to 18: build and authorisation. The largest technology spend, hiring of approved senior managers, and, on the UK route, mobilisation with a deposit cap. Revenue is still close to zero.
3. Months 18 to 36: launch and growth. Marketing becomes the biggest variable cost, while fraud losses and support costs appear for the first time.
4. Year 3 onward: scale or stall. Either revenue per customer rises enough to cover fixed costs, or the company needs another funding round, as Monzo’s history shows.

In other words, the cost to start a neobank is really the cost of surviving two to three years with little income. That is why funding rounds, not launch budgets, are the figures that appear in the public record.

How the cost to start a neobank differs by country

• United States. New bank charters are rare and slow, so most start-ups use partner banks. The cost shifts from capital to partner fees and to the oversight those banks now demand after the Synapse collapse.
• United Kingdom. The mobilisation route lets a bank launch with restrictions, but capital must be held separately from build costs, and the Bank of England expects detailed plans throughout.
• European Union. A licence in one member state can be passported across the bloc, which spreads the fixed cost over a larger market. The 5 million euro floor applies to credit institutions.
• Australia and others. Full licences are available but, as Xinja and Volt showed, the capital needed to keep them through years of losses can exceed what founders raise.

Common misconceptions about the cost to start a neobank

• The legal minimum capital is the budget. It is a floor that must be held, and regulators often require more; the operating budget is separate and usually larger.
• A white-label platform makes it cheap. Platforms reduce build time, but compliance, people and marketing remain, and partner fees replace some capital.
• Customers arrive on their own. Acquisition is one of the largest lines, and referral rewards count as spend.
• Profit follows launch quickly. The leaders took years; see are neobanks profitable for the actual timelines.

What this means for you

If you are researching this as a founder, talk to your regulator and a specialist adviser early, and request the current application guidance. If you are an investor or student, look for audited figures rather than blog estimates, and treat headline funding totals as evidence of how much capital was consumed rather than a benchmark for newcomers. For the broader business logic, see how neobanks make money.

Questions to answer before you estimate a budget

1. Which country and which licence category will you apply under, and how long does the regulator say authorisation takes?
2. Will you hold customer deposits yourself, or will a partner bank hold them?
3. What products will you launch with: spending accounts only, or also credit and savings?
4. How many months of costs can you fund before the first revenue arrives, and what is your plan if funding rounds are delayed?
5. Who will own financial crime controls from day one?

A founder who can answer these in writing is much closer to a credible budget than one who starts from a headline number.

Sources and further reading

• Capital Requirements Directive, Article 12
• E-Money Directive, Title II
• Bank of England: new bank mobilisation
• OCC: Comptroller’s Licensing Manual, Charters
• FDIC: handbook for organizers of de novo institutions
• Wikipedia: Monzo (funding and profit history)
• UKTN: Monzo FY2026 results
• FCA: Monzo fine (July 2025)
• Banking Dive: Chime files for IPO
• Chime: Q2 2026 results release (SEC)

Frequently asked questions

How much does it cost to start a neobank?

There is no single reliable figure. Costs depend on the licensing route, country and scale, and well-known neobanks raised and lost very large sums before reaching profit.

What is the minimum capital for an EU bank?

Initial capital of 5 million euros under the Capital Requirements Directive, with member states able to authorise some categories at lower levels, not below 1 million euros.

What is the minimum capital for an e-money institution in the EU?

The E-Money Directive requires at least 350,000 euros of initial capital.

Can I launch a neobank without a banking licence?

Yes, through a partner bank or an e-money or payments licence, but each route has limits and customers do not get the same protection.

How long does it take to get a UK bank licence?

Timelines vary. The Bank of England says a new bank can spend up to 12 months in mobilisation with a 50,000 pound deposit cap.

How did Monzo fund itself?

Through repeated funding rounds, including crowdfunding and large venture rounds, before its first annual profit for the year ending March 2024.

More questions on the cost to start a neobank

Is a neobank a good business?

Some are now very profitable, but many take years and large funding rounds to reach profit, and some have closed.

Where can I get official guidance?

Contact your national regulator. The Bank of England, OCC and FDIC publish guidance for new banks.

Does the cost to start a neobank include the capital you must hold?

Regulatory capital is a separate requirement. It must be held on the balance sheet and cannot fund the build, so a founder needs the capital requirement plus an operating budget for technology, staff and marketing.

Can a white-label platform cut the cost to start a neobank?

It can shorten the build and reduce upfront technology spend, because the platform supplies the core systems and partner bank connections. Compliance staff, customer acquisition and partner fees remain, so it lowers one line rather than the whole budget.

Is buying an existing licensed bank cheaper than applying?

Sometimes. Acquiring a small licensed bank avoids the authorisation timeline, but it requires regulatory approval of the change of control, and the buyer inherits legacy systems and obligations. Most start-ups cannot raise enough to do it.

General information only, not financial, legal or investment advice. Rules and figures change, so consult your regulator and a qualified adviser.